Today, the government tabled the Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act, 2010. This bill amends ant act of government that was previously rushed through without thorough debate.
This time around Michael was able to speak to it and a draft transcript is below for your reading pleasure. As always the official transcript will be posted when available.
2010 Legislative Session: Second Session, 39th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
Official Report of
DEBATES OF THE LEGISLATIVE ASSEMBLY
(Hansard)
TUESDAY, MARCH 30, 2010
Afternoon Sitting
Volume 13, Number 2
Second Reading of Bills
BILL 8 — ENERGY, MINES AND
PETROLEUM RESOURCES STATUTES
AMENDMENT ACT, 2010
M. Sather: It’s my pleasure to rise on second reading debate of Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act, 2010.
Having been in this House back in 2008, this bill looks familiar to me. That’s not surprising, because a large portion of it is, in fact, familiar to those of us that were here in 2008, including the member for Juan de Fuca, who spoke about this bill earlier.
The first iteration that we saw back then was called the Oil and Gas Activities Act. The disappointing thing about the introduction then of the Oil and Gas Activities Act is that we in the opposition — and that means on behalf of the people of British Columbia — did not get to explore the specifics of that act for whatever reason. The government simply didn’t call committee stage debate of the bill.
It didn’t, though, die on the vine, as it were, because at the end of that session back in 2008, the government invoked closure on some ten bills, including that bill. So it was basically rammed through at the end of the session without any debate.
However, most of the provisions of that bill were never brought into force. Now we’re in the somewhat peculiar or awkward position of seeing a bill come before the House that proposes amendments to an act
[ Page 3899 ]
— to wit, the Oil and Gas Activities Act — whose provisions are not in force.
We’re confident…. Well, I shouldn’t say we’re confident. We’re hopeful on this side of the House that this time around, on take 2 of the Oil and Gas Activities Act, that we will indeed get to canvass the government in full on the details of the bill. It’s a fairly large bill, and it deserves that kind of scrutiny.
I think the minister is confident, I hope, that we’re going to get to committee stage on this bill unless…. I know the government is very, very keen on another piece of legislation that was introduced in this House earlier today, in effect the HST bill. I suppose it has another name, repealing the PST.
Should that knock us off the agenda once again, and we can only hope that won’t happen, eventually, at least, we should get back to discussing the important aspects, the nitty-gritty, the details of the Oil and Gas Activities Act. I, like other members on this side of the House, have expressed our interest and the fact that we’re looking forward to that debate.
Several members — it could include the minister; I’m not sure — have talked about the robustness of natural gas exploration almost entirely on the other side of the Rockies in this province and the northeast part of this province, Peace River North and Peace River South constituencies. They have made mention, too, of the aspect of some of these gas deposits becoming more difficult to get at, in particular the shale gas deposits.
The shale gas deposits at Montney and Horn River up in the Fort Nelson area — or at least I believe Horn River is…. It kind of raises a bit of a problem. The government is apparently greasing the skids, if you will — if that’s not an impolite phrase to use, Madam Speaker — to enable development of those shale gas deposits by dropping royalty rates on wells drilled between September of last year, I believe it was, and June of this year to a meagre 2 percent. I guess the costs are high.
The industry has been given an incentive. A member opposite, I think from Cariboo-Chilcotin, said it’s not a subsidy but an incentive subsidy. It’s an encouragement — let’s be charitable and call it that — to the oil and gas industry to proceed with those shale gas deposits. I think this bill is part of that encouragement. I expect the minister would readily admit that, and I expect he feels good about that.
As we’ve talked about when some of us discussed the bill at second reading, the Oil and Gas Activities Act back in 2008, the whole idea of the pursuit of the exploration of conventional fossil fuels is problematic. I think it should be problematic for this government. I mean, the Minister of Finance earlier today stood in this House and vigorously said: “We’ll defend our environmental record against yours any day.”
But Madam Speaker, how does the government reconcile their professed interest in combating climate change? I know that the Premier’s focus tends to shift a bit from one thing to the next, but we still hear about clean and green and so on from the other side, so I expect that commitment, in theory at least, is still there.
I don’t know what the minister thinks or what the government thinks or what the Minister of Environment thinks, but I think that provides a certain amount of discordance in the government’s message, because the shale gas deposits have a couple of problems with them.
Number one, they take a lot of energy to extract. It may very well be that the minister is talking to, I think, his good friend and former colleague Richard Neufeld about extraction or the development of Site C electrical resources, some of which — in fact, according to the now Senator, more than half of which — would go to extract these very shale gas deposits.
The companies involved say: “Well, it would be a good opportunity, were we to develop those gas deposits, to ship that gas or a good portion of it over to the tar sands to develop the tar sands.” Well, that’s problematic, I think, for this government that professes to be clean and green, because certainly tar sands development is anything but clean and green.
No less than Peter Lougheed, a former Premier of Alberta, even chastised his province for their haste in developing the tar sands. In fact, he questioned whether it made sense to be using much cleaner natural gas to extract a much dirtier form of energy.
These are all questions that I think the government has to address when we’re looking at a bill like this — the minister, I guess. There are somewhat wide-ranging opportunities in committee stage, so he will do that, I’m sure. I know the minister is very fond of supporting, and so he should be supporting, the oil and gas sector. It’s his ministry, and it’s his role to do that.
I wanted to talk for a minute about the orphan wells that are covered under Bill 8. The orphan wells are well sites that, hey, have become orphaned — somehow abandoned or left on their own — and are out there in need of reclamation. This bill has some things to say about that.
I think the member for Stikine mentioned some of this material, but I want to bring it up again. With regard to the costs of reclamation, well operators have to pay a security deposit of $7,500 to the province. Whereas, in fact, a report of the Oil and Gas Commission in 2006 concluded that there may be well over 5,000 wells that are not yet assessed and that the cost runs around a hundred grand, as a more realistic amount. There’s a real shortfall there between $7,500 and $100,000.
Of course, if we get to clean up these sites, to reclaim these sites, as I hope we certainly will — and I know the minister will want to do that as part of the clean and
[ Page 3900 ]
green agenda of the government — it’s going to end up, by estimates, costing over a billion dollars.
We’re not talking about a minor endeavour. It’s going to have to be significant. Nonetheless, it’s work that needs to be done.
Apparently, the site classification guidelines were not in place by March of last year, which is fairly recent, resulting in many of these sites not being assessed. There are currently 20,400 wells in B.C. — 4,300 are inactive sites, 2,000 are now decommissioned, and 38 are orphan sites. So there is some work to be done there, and I look forward to that work being done, because it certainly needs to be.
Now, the report that the Auditor General did — it was just recently; I believe it was last month that it came out — said that we lack baseline studies for monitoring and effective safety mitigation for air quality in and around the oil and gas industry.
Madam Speaker, you will know, I’m sure — as most British Columbians do that have been watching the news or reading the papers, whether it’s on line or in the old-fashioned way — that there is a lot of concern on both sides of the border, actually, in the Peace River country about the safety of oil and gas emissions, particularly the sour gas, which can be quite deadly.
I remember the admonitions about sour gas when I was a young man growing up in the Peace River country and working on the rigs out there. It can kill. There have been some really strong feelings expressed — too strong, most of us would say, I’m sure — with regard to some of the actions that have been taken to sabotage pipelines in the Peace River country.
But when you talk to folks up there, a lot of them — particularly landowners, farmers and the like — are really concerned about these emissions and what risk it puts them at. So the baseline studies need to be done if that work is going to be done properly.
The Auditor General was fairly definitive in his comments. He said that the British Columbia government is failing to meet its responsibilities to manage human health, environmental and financial risks associated with oil and gas resource development.
He goes on to say that contaminants found at the sites “include various types of hydrocarbons, naturally occurring radioactive substances, trace metals, salts, various process chemicals and herbicides.” Well, that’s a toxic mix there, and we want to be sure, and I’m sure the minister does, that these sites are dealt with. I hope that they will take the Auditor General’s report seriously and work diligently to find a solution for these considerable issues that we’re facing.
I wanted to talk a little bit, too, about right of entry to lands, because there’s a lot of conflict, notwithstanding that oil and gas — gas exploration in particular, in the Peace River country — provides, definitely, a lot of employment for folks up there. But with landowners there tends to be a fair bit of conflict, and they feel oftentimes that the industry has a lot of power and doesn’t try to accommodate their interests that well.
A comment from a member — the chair, actually — of the Northeast Energy and Mines Advisory Committee with regard to the right of entry, which is still, she says: “Available to industry, even if the mediation and arbitration process has not been completed.” That’s kind of like shoot first, and ask questions later.
No one wants to see, I don’t think, any process drawn out. You know, you have to come to a conclusion. Nonetheless, if the oil company is already moving in on your land while that process is in place, that could be a little bit disturbing for people.
There are expropriation parts of Bill 8 as well. One of the residents up there commented that they actually felt that expropriation would be an improvement to the process that’s in place now and that maybe they even feel than the process that will be in place when, presumably, this bill is passed. If that’s the case, I hope that expropriation does work well, and I hope it works a lot better than what I have seen in terms of government expropriation in my community.
In this case, it was a transportation corridor. They came in and expropriated farmers’ properties, at great disruption to them. In one case, they very nearly destroyed the farm, and the prices they paid were half or less of what the going rate for farmland was in Maple Ridge and Pitt Meadows. I hope that’s not happening to the poor farmers up in the Peace River country, because having been a Peace River country farmer myself, I know it’s tough up there, and they need all the help they can get.
The farmers tend to be a little bit left behind in the discussion. When you’ve got a huge industry like the gas industry that has and, I guess, will continue to produce a lot of revenue and possess quite a lot of power, sometimes the farmers are kind of left, maybe not as second-class citizens but just about.
Now, the bill itself says that the land that may be expropriated must not exceed, and this is with regard to pipelines, 18 metres in width. It goes on to say that “…the commission may authorize, on any conditions the commission considers appropriate, an expropriation, in accordance with the Expropriation Act….”
Well, I would worry a little bit about the phrase “any conditions the commission considers appropriate.” I think if you’re being expropriated, you’re looking for a little bit of more clarity with regard to what kind of process you’re facing. I hope that the government might improve on that, or at least the minister can let us know what folks have to expect in that regard.
We have the Expropriation Act, the expropriation provisions. The government talks a lot about this helping to create certainty for industry, and I can understand
[ Page 3901 ]
this from the industry’s point of view. But I mean, we hear that a lot from this government, about certainty for industry. We hear it also with the harmonizing of the environmental assessment acts, provincially and federally. That one is causing some concern. I hope that the interests of other stakeholders, particularly residents and landowners in the area, aren’t being sacrificed at the altar of certainty for the industry.
In a press release that was put out, “Act Supports Environmental Protection, Landowner Rights,” it says: “Amendments to the Oil and Gas Activities Act increase the regulatory powers of the Oil and Gas Commission and enhance government’s ability to protect the environment from potential impacts of natural gas and petroleum development.”
I’m not at all sure yet. What I want to hear from the minister during committee stage is how, in fact, this bill protects the environment. It says: “The province will have the authority to set environmental objectives for the Oil and Gas Commission to incorporate into their permitting decisions.” What environmental objectives? I find that a vagueness of Bill 8, and I hope that we’re going to get more clarity.
Again, it may come, if it comes at all, in the form of regulations down the road. That always makes it difficult for members of the opposition to be supportive of legislation in which a great deal, apparently, is going to take shape by regulation which will be brought in by cabinet. So we won’t be a part of those discussions.
I’m hopeful that in fact the government is going to protect the environment. They say that they’re committed to protecting the environment. I will wait for further elucidation of that.
With regard, again, to “Entry on unoccupied Crown land,” which is under part 16 of Bill 8, it says: “…an applicant for a permit under the Oil and Gas Activities Act, and on submission by the person of plans or other information required by the commission, the commission, subject to any terms or conditions the commission considers appropriate, may authorize the person to enter, occupy or use unoccupied…land.”
Again, the vagueness, “any terms or conditions the commission considers appropriate,” to me doesn’t sound like really strong legislation. It sounds a little loosey-goosey.
Some of the residents in the northeast are jaded about the process. They say that it’s very much tilted in favour of industry against them. They’ll be looking for some assurance that there’s going to be improvement not just in providing surety or certainty for industry but that their interests are going to be protected.
I see my time is getting fairly short. I want just finally to mention something else, and that’s about safety. Now, I don’t see — or if it’s there, I missed it — any aspects of Bill 8 that deal with safety in the industry. It may be that that’s covered off elsewhere and that it isn’t required of this bill. But I do know from past experience, having worked in that industry, that it can be and is very dangerous. I had a good friend who was killed in the gas industry.
We need to be sure, for those people that are rushing out there and working overtime and double time and not getting a lot of sleep sometimes, that there are safety regulations there to protect them as well. Hopefully, the minister can assure us that things are improving. I haven’t any particular cause to believe that they haven’t. The incident I’m talking about took place some many years ago.
With that, Madam Speaker, I will cede the floor. If there are any members on the government side or on this side that want to talk about Bill 8, I’d be glad to hear them.
